In a significant step towards enhancing transparency in climate-related financial disclosures, the IFRS Foundation has released a pivotal guide titled “Applying IFRS S1 when reporting only climate-related disclosures in accordance with IFRS S2.”
This initiative aims to facilitate companies in navigating the complexities of reporting climate-related information under the International Sustainability Standards Board (ISSB) Standards.
The guide is designed to assist corporations in focusing solely on climate-related disclosures when adhering to the ISSB’s standards, without the need to report other sustainability-related risks and opportunities unless applicable. This streamlined approach addresses the urgent demand from investors for critical climate-related information to aid in decision-making processes. The publication echoes the ISSB’s dedication to aiding businesses in the preparation of essential data and enhancing the quality of information available to investors.
The development of the guide was influenced by feedback during the crafting of IFRS S1 and IFRS S2, where stakeholders expressed concerns regarding the availability of data and the readiness of companies to provide comprehensive information on various sustainability-related risks. To mitigate these challenges, the ISSB has introduced specific transition reliefs within the standards, including the ‘climate-first’ transition relief highlighted in the guide. This relief allows companies to prioritise climate-related disclosures, ensuring they meet investor needs without overwhelming complexities.
The guide not only provides a structured approach for companies to comply with IFRS S1 requirements but also emphasises the importance of such disclosures in fostering a transparent, informative, and accountable financial environment.
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